NSW Health late payments
Since May 2005 MTAA has compiled data from member companies on the percentage of invoices outstanding over 30 days from NSW Health Local Health Districts (LHDs), formerly Area Health Services. Members can compare their payment data to the information on the spreadsheet, which has the information on each of the LHDs on one tab and a graph of the compiled data on the other.
- NSW Health LHD payment data (last updated April 2014)
Advice on reducing NSW Late Payments
On 1 January 2011, NSW Health started trading under the new LHD business model. MTAA has held discussions with NSW Health to try and help suppliers resolve outstanding AHS debts and prevent LHD debts from accumulating. The following advice is provided:
- do NOT accept an order and send an invoice without a valid LHD purchase order number
- CHECK the price and quantity of measure and contact the source of the order to correct if necessary before accepting the order
If the order appears in lower case, then it has been placed as a free text order, i.e. not from the catalogue, and there is a much higher probability of it having an error in price or unit of measure. Conversely, if the order appears in upper case with a consistent, generic description, it probably has a Health Item Master File (HIMF) number and there is a much lower probability of it having an error in price or unit of measure. Try and standardise pricing across the state, or at least no lower than LHD level.
- DO ensure the invoice is sent to the correct service centre (usually Newcastle or Parramatta) and not just with the goods
- When investigating reconciliation differences for price/quantity use the contacts on the RED Healthshare Procurement & Logistics contact list.
When investigating outstanding invoices:
- Contact the service centre initially (see WHITE HSS accounts payable contact list) as they will log the enquiry into the system and help determine the cause
- If Healthshare has completed their reconciliation and confirmed the invoice has been validated and awaiting payment the vendor may then need to contact the LHD accounts payable contacts
- If still unable to resolve follow the escalation contacts, please see GREEN HSS Financial Services contact list.
NSW Healthshare has extended an invitation to all MTAA members to participate in their vendor Engagement programme which covers procurement to pay cycle, strategies about pricing and working together. Note this is not to discuss individual invoices. Meetings are held quarterly. If you would like to participate contact Ben Tye on P: (02) 4926 7930 or E: email@example.com
Further information on the LHD process is available on the Procurement webpage.
If members are experiencing difficulty with payments, please contact Warren Mitchell on firstname.lastname@example.org
Advice for small business on interest for NSW late payments
The Office of the Small Business Commissioner has provided advice regarding the Government's 30 Day Payment Policy. Under this policy:
- a small business is an Australian or New Zealand-based firm that has an annual turnover of under $2 million in the latest financial year
- NSW Public sector agencies must pay small business suppliers for the provision of goods and services, not later than 30 days from the date of receipt of a correctly rendered invoice or statement, unless an existing contract or standing offer provides for an alternative time period
- shorter or longer payment terms are permitted for new or amended contracts entered into on or after 14 July 2011. However, payment terms longer than 30 days are permitted only where the nature of the goods and services or the structure of the purchase make it impractical to require payment within 30 days
- where payment is not made within the specified time period, simple interest must be paid automatically unless an existing contract specifies otherwise, with implementation of this requirement commencing from a date to be determined
- The NSW Government Policy is available here.
If you are experiencing difficulty with a NSW public sector agency in relation to the 30 day payment policy, please contact the Office of the Small Business Commissioner on 1300 795 534 for assistance.
Federal Government Assistance for Payment to Small Business
In December 2008, the Federal Government introduced a policy, which requires all government agencies to pay
invoices from small business within 30 days of receiving a correctly rendered invoice (small business means an enterprise that employs less than the full time equivalent of 20 persons).
In July 2013, the Federal Government released a Prompt Payment Protocol Discussion Paper to seek stakeholder views on how a Prompt Payment Protocol may improve business-to-business trade payments, help improve business cash flow and strengthen business relationships.
The closing date for written submissions on the Prompt Payment Protocol Discussion Paper is 23 August 2013.